PwC survey shows APAC to see ESG investment funds boost

PwC publishes asset and wealth management survey that shows exponential expectations for ESG investment funds, largest rise expected in Asia-Pacific region

A new report from leading consultancy PwC highlights the surging rise of environmental, social and governance–orientated (ESG) investments.

Asset and wealth management revolution 2022: Exponential expectations for ESG analyses the results of PwC’s global survey of asset managers and institutional investors. The findings reveal interesting regional outlooks and ten trends that stress the need for asset and wealth management (AWM) professionals to move away from ESG-orientated investments and instead imbed ESG principles into their processes.

The survey of 250 asset managers and 250 institutional investors accounts for around half of the global assets under management (AuM) – valued at around US$50 trillion.

The US perhaps unsurprisingly boasts the largest AWM market at around US$67 trillion and it seems attitudes there towards ESG products are changing faster than people may think The PwC survey suggests 81% of institutional investors in the US in ESG products over the next two years, which is similar to Europe, at 83.6%. 

Compliance is driving shift towards ESG funds

High-profile commitments to fight climate change are seen as one of the drivers in the US, and the direction for investors seems clear, even if individual states have different attitudes to climate change priorities.

The survey predicts that Asia-Pacific will have the greatest percentage increase in ESG AuM, while Latin America and The Middle East & Africa are all rising fast – but admittedly lag far behind Europe and the US.

While this may sound like huge strides forward in APAC, it would still represent only US$5 trillion at best, compared to Europe on US$25.7 trillion and the US on US$16.3 trillion.

ESG AuM in Latin America would total just US$0.3 trillion, and the Middle East & Africa US$0.4 trillion.

PwC says the ESG-orientated AuM is set to grow faster than the AWM market as a whole – share of ESG assets over total AuM increasing from 14.4% in 2021 to 21.5% in 2026.

PwC highlights 10 key market trends shaping the ESG agenda in AWM

  1. ESG is replacing asset price increases as an engine of growth
  2. Pursuing ESG is fundamental
  3. The investible universe for ESG funds will open up
  4. ESG has broadened objectives and fiduciary duties
  5. Investors are pushing for new ESG products – but demand outstrips supply
  6. To attract new investment, managers will need to differentiate their products and demonstrate ESG performance
  7. Investors say they want more regulation
  8. A meaningful ESG strategy requires investment
  9. E, S and G must be balanced as part of a just transition
  10. Managers need a proactive risk-mitigation strategy for mislabelled products

READ the full report HERE.

Share

Featured Articles

Nirvik Singh, COO Grey Group on adding colour to campaigns

Nirvik Singh, Global COO and President International of Grey Group, cultivating culture and utilising AI to enhance rather than replace human creativity

How Longi became the world’s leading solar tech manufacturer

On a mission to accelerate the adoption of sustainable energy solutions, US$30 billion Chinese tech firm Longi is not just selling solar – but using it

How Samsung’s US$5billion sustainability plan is working out

Armed with an ambitious billion-dollar strategy, Samsung is on track to achieve net zero carbon emissions company-wide by 2050 – but challenges persist

UOB: making strides in sustainability across Southeast Asia

Sustainability

Huawei smartwatch goes for gold with Ultimate Edition

Lifestyle

How IKEA India plans to double business, triple headcount

Corporate Finance